Foxconn knew about Samsung’s plan to invest in Sharp. Foxconn-Samsung partnership in the making?
Yesterday Sharp announced that Samsung bought a bit more than 3% of its shares, paying around $111 million, and in the process becoming the Japanese company’s biggest shareholder that isn’t a financial institution. Now this is good news for troubled Sharp, as well as for Samsung, since its investment secured it a steady supply of LCD panels form Sharp for the foreseeable future.
But what about the Hon Hai group (known to you and me as Foxconn)? Apple’s biggest manufacturing partner is in a strange situation. On one hand, it wanted to invest heavily in Sharp. Around this time last year, a big deal was announced between Foxconn and Sharp, a deal through which the Taiwanese company would buy around 10% of the Japanese company, thus becoming its biggest shareholder. However, that deal hasn’t been finalized yet, and the deadline for doing that is later this month.
On the other hand, Foxconn’s founder and head honcho Terry Gou has always had nothing but harsh words for Samsung. Those may have stemmed from his company’s close ties with Apple, which is obviously not Samsung’s biggest fan right now. So how does Foxconn feel about the Samsung-Sharp deal?
Well, we’ll probably never know the full truth. The thing is though, Foxconn was notified about this agreement in advance. Foxconn declined to comment on the deal, “as Sharp is an independent company”, but it said that it appreciates Sharp’s respect for the relation with it. In other words, a thanks for the heads up.
You may be wondering what will happen to the Foxconn-Sharp deal now. Will Terry Gou agree to be a shareholder in the same company as Samsung? Common sense (and history) would say no, but things may be changing.
According to certain unnamed sources, a future partnership between Foxconn and Samsung is becoming more and more likely. First of all, because Foxconn hasn’t opposed the deal between the Koreans and Sharp. Second, because apparently Terry Gou’s criticism of Samsung’s strategies has started to lessen recently. His hostile attitude towards Samsung so far had more to do with trying to please Apple, as well as having something to do with ‘national sentiment’, rather than anything else. Which means that Gou may be slowly warming up to the idea of possibly partnering with the Korean giant.
As you may have gathered, at this point this is nothing but conjecture spitted out by ‘market watchers’. So none of it may be true. On the other hand though, stranger things have happened in the mobile industry, and we’ve certainly seen stranger bed fellows.